Carter Company Sells Merchandise on Account for $4,000 to Hannah $\begin{array}{lrr} \text { Cash } &3,400\\ \text { Accounts Receivable} &&3,400\\\end{array}$

Short Answer

Carter Company sells merchandise on account for $4,000 to Hannah Company with credit terms of 2/10, n/30. Hannah Company returns $600 of merchandise that was damaged, along with a check to settle the account within the discount period. What entry does Carter Company make upon receipt of the check? a.
$\begin{array}{lrr} \text { Cash } &3,400\\ \text { Accounts Receivable} &&3,400\\\end{array}$

b.
$\begin{array}{lrr} \text {Cash } &3,332\\ \text {Sales Returns and Allowances } &668\\\text { Accounts Receivable } &&4,000\\\end{array}$

c.
$\begin{array}{lrr} \text { Cash } &3,332\\ \text {Sales Returns and Allowances } &600\\\text {Sales Discounts } &68\\ \text { Accounts Receivable } &&4,000\\\end{array}$

d.
$\begin{array}{lrr} \text { Cash } &3,920\\ \text { Sales Discounts } &80\\\text { Sales Returns and Allowances } &&600\\ \text { Accounts Receivable } &&3,400\\\end{array}$